1. Slide 1 Test Methods and Tools for ERP Implementations - Proposed Research Project Paul Gerrard Gerrard Consulting 1 Old Forge Close Maidenhead Berkshire SL6 2RD UK e: paul@gerrardconsulting.com w: http://gerrardconsulting.com t: 01628 639173

2. Introduction to ERP and the ERP Market ERP Testing Outline of Work Already Done Proposed Research Project. Agenda Assurance with IntelligenceSlide 2

3. Enterprise Resource Planning (ERP) systems represent a huge market in the commercial arena SAP, Oracle and more recently, Microsoft, dominate the market Testing is a significant effort but is hardly supported by methods and tools Experience shows that testing in these projects is critical, but often neglected A Benefits, Risk and Coverage-based test approach could significantly reduce the risk of failures. Summary Assurance with IntelligenceSlide 3

4. Enterprise Resource Planning systems (ERPs) aim to integrate all data and processes of an organization into a unified system Typical ERP system will use multiple components of computer software and hardware to achieve the integration Key ingredient of most ERP systems is the use of a unified database to store data for the various system modules. An Introduction to ERP Assurance with IntelligenceSlide 4

5. ERP scope has expanded dramatically and usually includes: - Manufacturing - Supply Chain Management - Financials - Projects - Human Resources - Customer Relationship Management - Data Warehouse Large organisations want to implement standard processes and systems across divisions and subsidiaries ERP offers attractive, integrated solutions The market for these solutions is huge. Scope of ERP Assurance with IntelligenceSlide 5

6. ERP market dominated by SAP, Oracle, Microsoft worth EUR 40 billion SAP is the biggest and most popular - Founded in 1972 by five ex-IBM employees, by 2005, there were 100,600 installations worldwide, with over 25 industry-specific modules in the SAP portfolio. SAP is the world's third-largest independent software vendor Founded in 1977, Oracle were first to market a reliable relational database - The second largest software company after Microsoft - Since the 1990s, they have marketed Financial, HR and other solutions and through a series of acquisitions, including PeopleSoft and Siebel is now the second largest ERP vendor after SAP. [3] Microsoft, also started in 1977 - dominate the proprietary software market on the desktop and small to medium servers. - Microsoft were a big Siebel software user but since Oracle acquired Siebel, they have worked hard to build an ERP product suite of their own and are now probably in third place in ERP The ERP Market Assurance with IntelligenceSlide 6

7. ERP services market possibly worth more than EUR 100 billion Accenture, IBM, CapGemini, LogicaCMG, CSC, HP and others have substantial ERP practices ERP services include - Consultancy - Configuration - Application hosting - Integration - Implementation and deployment - Training - Full-process outsourcing Projects tend to be large, long term, business critical and big-budget. EUR 200m implementation projects are not unusual. ERP Services Market Assurance with IntelligenceSlide 7

8. If the big three get their way, the integration of desktop (Windows), ERP and associated applications builders are poised to transform the use of IT in business SAP and Microsoft Duet project integrates SAP back office data with the ubiquitous Office suite from Microsoft Currently, these applications are small in number, but full integration of desktop office products and ERP systems appear to be the next phase of development in the market. The (Near) Future of ERP Assurance with IntelligenceSlide 8

9. ERP implementation projects typically have a mix of the following disciplines: - Package configuration and/or parameterisation - Package customisation (including programming) - Infrastructure development/upgrading - Integration with legacy systems - Data migration - Business change (process design and training) - Testing (typically unit, sub-system integration, system- system integration, acceptance) Most projects are large scale and critical, the testing budget is substantial – perhaps 50%. The Nature of ERP Implementation Projects Assurance with IntelligenceSlide 9

10. ERP Testing Assurance with IntelligenceSlide 10

11. Remarkably, very little research into the testing of packaged ERP suites Few books on the subject; those that do exist focus on bundled tools Poorly supported The software vendors have their own methodologies for testing, but these focus on process flows through configured components In effect, such tests prove the software ‘does what it does’ The behaviour of ERP suites are typically controlled by configuration parameters and do not involve ‘software’ maintenance at all. ERP Testing 1 Assurance with IntelligenceSlide 11

12. However, there are specific areas of software change and risk - Where the ERP system must trigger an interface and import from or export to legacy systems - ‘user-exits’, custom procedures, interface programs - Amendments to the legacy systems themselves are required. Much of the testing has to focus on - The behaviour of the system as experienced by its users - The outputs generated - Integration with legacy systems Data migration is a challenging area of ERP projects - A lot of the functionality in integrated systems is master-data driven - Data migration efforts need evaluation, reconciliation, and testing using the integrated applications. ERP Testing 2 Assurance with IntelligenceSlide 12

13. ‘How to approach testing of ERP systems to demonstrate its behaviour, to meet the needs of its users and address the risks of failure?’ An integrated set of test methods and tools is required: - Results-based management (aka Benefits Realisation), modelling of results- chains to provide input to a benefits-based test approach - Experience-based risk assessments that can provide input to a risk-based test approach. - Modelling of integrated user, automated and manual processes and interactions in a format useful to testers. Derivation of objective, measurable and manageable test objectives from these three models. To integrate these three test objectives into a non-proprietary life-cycle test methodology that can be managed systematically. Some foundation/visionary work has already been performed by the author, but the approach needs more research, rigor and proving in a commercial environment. The ERP Testing ‘Problem’ Assurance with IntelligenceSlide 13

14. Outline of Work Already Done Assurance with IntelligenceSlide 14

15. Research in four areas has already been performed - Risk-Based Testing approach - Testing as intelligence gathering - Managing projects with intelligence - Lessons Learned in ERP Projects Papers/presentations referenced at the end of this slide pack. Work Already Done Assurance with IntelligenceSlide 15

16. The first book focusing on Risk-Based Testing, ‘Risk-Based E-Business Testing’ [6], set out a systematic approach to testing, driven by requirements and product risk where the business environment was focused on the risky real-world business environment rather than esoteric safety-critical landscape. 1.Risk-Based Testing Defined Assurance with IntelligenceSlide 16

17. Testing is an information-gathering exercise whose value is in the information gathered, not the activity we call testing was presented The term, ‘Project Intelligence’ was coined to represent the information on business benefits, product risk and test coverage that test strategies should focus on. 2. Testing as Intelligence Gathering Assurance with IntelligenceSlide 17

18. Project Intelligence (PI) is the key project information gathered by testers that helps managers to control their projects Analogous to military intelligence - Commander needs to have intelligence before formulating his plan - As events unfold, intelligence reports affect the campaign - Final intelligence reports indicate the campaign is won Software projects need risk analyses as input to testing and QA - As testing proceeds, it provides the intelligence to measure progress and support decision making - Final test reports indicate the delivered system is acceptable Test process is a systematic set of activities to achieve test objectives. 3. Managing Projects with Intelligence Assurance with IntelligenceSlide 18

19. Successful projects depend on - Clear and change-managed objectives - Attention to risk management - Monitoring of quality, schedule and cost. Successful project managers manage achievements, not activities The readiness and acceptability of project deliverables are what must be monitored, rather than the completion status of activities. 3 Managing Projects with Intelligence 2 Assurance with IntelligenceSlide 19

20. Decision making in projects is critically dependent on accurate information Key role of QA and testing is to gather Project Intelligence and present this to Project and Stakeholder management Project Intelligence refers to the three information gathering activities - QA and test - benefits analysis and - ongoing product risk management. 3 Managing Projects with Intelligence 3 Assurance with IntelligenceSlide 20

21. These three fundamental activities promote better communication within projects They also enable stakeholders to make better decisions when setbacks occur early and when change becomes inevitable and testing is squeezed The PI approach transforms your perception of testing, promotes closer collaboration between development and test and better inform management decision making. 3 Managing Projects with Intelligence 4 Assurance with IntelligenceSlide 21

22. Based on research into ERP (in particular SAP) project experiences - To identify common patterns of failure in (typically) large scale, long-term projects - Sources included integration companies, project manager staff and user management - Over seventy actual project failure modes and risk mitigation actions experienced by interviewees were identified. 4 Lessons Learned in ERP Projects Assurance with IntelligenceSlide 22

23. The purpose was to provide a coherent set of ‘challenges’ to projects For each lesson/risk the question is - ‘has this risk been addressed?’ - intention would be to ensure all the foreseeable risks of concern are addressed Lessons Learned ‘areas’ include Organisation, Preparation, User Issues, Change Management as well as Testing and QA With further development, will set out the requirements for an ERP Test Strategy. 4 Lessons Learned in ERP Projects 2 Assurance with IntelligenceSlide 23

24. Proposed Research Project Assurance with IntelligenceSlide 24

25. Foundation work has already been performed by the author, but the approach needs more research, rigor and proving in a commercial environment Academic and commercial partners are sought to refine, develop and prove these methods and tools. Challenge to Academia and Industry Assurance with IntelligenceSlide 25

26. Academia - One business school with a focus on change management involving ERP systems - One software engineering school with focus on building tools to support business change, decision making and testing Industry: - 5 large ERP user organisations - Interested in the results-based approach to business change - Experience of problems in the past, and/or are risk-averse - Have high commitment to testing and QA - Want greater control over ERP integration partners. Research team Assurance with IntelligenceSlide 26

27. Currently talking to potential industry partners - There is NO SHORTAGE of companies wanting to solve the ERP Testing Problem Plan to approach business schools Conference pitch to taicpart.org in Septembertaicpart.org If it’s not of interest to you, do you have colleagues for who might be interested? Plan Assurance with IntelligenceSlide 27

28. [1] Wikipedia, Enterprise Resource Planning, http://en.wikipedia.orghttp://en.wikipedia.org [2] SAP corporate website, SAP History: From Start-Up Software Vendor to Global Market Leader, www.sap.com/company/history.epx.www.sap.com/company/history.epx [3] Oracle corporate website, Oracle's History: Innovation, Leadership, Results, www.oracle.com/corpo rate/story.html www.oracle.com/corpo rate/story.html [4] Microsoft corporate website, Going Beyond Microsoft at 30, www.microsoft.com/about/companyinformation/timeline [5] SearchSAP.com research website, searchsap.techtarget.com/originalContent/0,289142,sid21_gci1230348,00.html searchsap.techtarget.com/originalContent/0,289142,sid21_gci1230348,00.html [6] Gerrard P., Thompson N., Risk-Based E-Business Testing, Artech House, 2002. [7] Gerrard P., “What is the value of testing and how do we increase it?” EuroSTAR 2002, Edinburgh. [8] Gerrard P., “Influencing Management with Intelligence” EuroSTAR 2003, Amsterdam. [9] Gerrard P., “Managing Projects with Intelligence”, EuroSTAR 2004, Cologne. [10] Gerrard P., “Lessons Learned in ERP Projects” EuroSTAR 2007, Stockholm. 5. References Assurance with IntelligenceSlide 28